New York Sees A Surge In Off-Market Luxury Deals

When billionaire Jacqui Safra hired Nikki Field to sell his New York City penthouse last year, he made a series of demands. Mr. Safra, a descendant of the Lebanese-Brazilian banking family, told the real-estate agent she had three months to quietly drum up interest in the Upper East Side triplex without listing it on the public market, Ms. Field recalled.

There were no professional photos of the Fifth Avenue co-op—just one snapshot of Central Park taken from the terrace—and Ms. Field, of Sotheby’s International Realty, was given access to the apartment for a single day of showings.

Ms. Field said she set the asking price at US$40 million the day before showings took place in May. Seven billionaires came to tour the roughly 7,000-square-foot apartment with a glass conservatory on the top floor, where Mr. Safra had lived for about 30 years. Five made offers, she said, and when she asked for their “best and final” bids, one billionaire offered US$60 million if they could seal the deal within the hour.

They immediately sent out a contract, Ms. Field said, and the buyer signed it and sent it back 30 minutes later with a $6 million deposit. The deal closed in August.

Off-market deals like Mr. Safra’s are fueling a rebound in New York City’s luxury market, which ground to a halt during the pandemic. In 2021, at least five of the top 10 residential real-estate sales in Manhattan took place with no active listing associated with them.

Agents said the approach—common in markets like Los Angeles and the Hamptons—is gaining traction in New York City, and not just in the upper echelon of the market, where private sales have long appealed to discreet buyers and sellers. Across the luxury sector, agents say, sellers are testing the rapidly changing market with whisper listings.

Meanwhile, limited inventory and pent-up demand are pushing buyers to angle for deals where and when they can find them, ushering in a new way of doing business.

“We are matchmaking,” said Clayton Orrigo, a real-estate agent at Compass. Off-market deals typically account for about 4% of his team’s annual sales, he said, but last year that number shot up to 28%.

In addition to Mr. Safra’s sale, recent off-market deals have included billionaire investor Daniel Och’s sale of a Manhattan penthouse and a one-bedroom unit at 220 Central Park South for $188 million, roughly double what he paid just over two years ago, The Wall Street Journal reported.

Joseph Tsai, co-founder of Alibaba and owner of the Brooklyn Nets, paid $157.5 million for two full-floor units and a smaller apartment at the building in another off-market deal last year. And Australian hedge-fund manager Greg Coffey, nicknamed the “Wizard of Oz,” bought an Upper East Side townhouse for $53.5 million in an off-market deal, records show. The seller was New York real-estate developer David Levinson.

Julia Koch, widow of billionaire industrialist David Koch, has been quietly shopping the couple’s 18-room co-op at 740 Park Avenue, seeking around $60 million or more. Earlier this year, a penthouse at 70 Vestry Street was available for $79 million, according to people familiar with the property. The owner is Italian businessman Silvio Scaglia, who recently split from Julia Haart, star of the Netflix reality series “My Unorthodox Life.”

While figures are hard to come by for deals intentionally kept out of the public eye, off-market sales of properties $4 million and up surged more than 75% in 2021 from 2020, and 17.5% from 2019, according to real-estate data analytics firm UrbanDigs. Excluding new development units, which are often intentionally held back, off-market deals $4 million and up rose 96.7% in 2021 from 2020.

Historically, off-market deals in New York were a rarity thanks, in part, to the industry group the Real Estate Board of New York, which discourages whisper listings. “I just don’t think it’s in the best interest of the seller or the buyer,” said Diane Ramirez, chief strategy officer at Berkshire Hathaway HomeServices New York Properties, who is co-chair of Rebny’s residential board. She said the entire market of buyers needs access to a listing for sellers to get the best price in a reasonable amount of time. “When you whisper a listing, you’re eliminating everyone who doesn’t hear the whisper,” she said.

Agents say the transparency of listing sites also has made the market efficient—meaning properties can fetch top dollar when they are offered to the widest possible buyer pool.

The exception has been for the most exclusive properties. Like fine art, homes with unique architecture and design sometimes don’t need mass market-style publicity, said Adam Modlin of Modlin Group. “You know who the collectors are,” he said. “You just call them.”

Last year, Mr. Modlin represented both sides of the deal when Mr. Levinson sold his Upper East Side townhouse to Mr. Coffey. He also brokered the $25.7 million off-market sale of a four-bedroom condo at 160 Leroy Street in downtown Manhattan. The identities of the buyer and seller couldn’t be determined.

Mr. Modlin said discretion and privacy are top priorities for his well-heeled clients, some of whom prefer whisper campaigns to public listings that splash photos of their bedrooms and private living spaces all over the internet. “It does get very personal,” he said.

The phenomenon accelerated during Covid, especially early on, when holding open houses was verboten. Later, sellers rejected the idea of crowds traipsing through their homes, preferring to vet one or two potential buyers. As some New Yorkers moved out of the city, listing properties off-market was a way to sell quietly without broadcasting the decision to business associates or starting the “days on market” clock on listing websites.

In the case of Mr. Safra, for example, Ms. Field said he didn’t want to publicize the listing if it wasn’t going to be successful. “If it was out there and he didn’t sell it,” she said, “he’s got a damaged listing.”

By the middle of last year, New York’s real-estate market had picked up, with luxury sales leading the way. Luxury sales in the fourth quarter of 2021 jumped 87.4% year-to-year and 48.6% from 2019’s fourth quarter. Demand quickly depleted the available inventory, which dropped 7.8% year-to-year in the fourth quarter.

Agents said some sellers are holding back inventory because they are unsure where prices are headed. Meanwhile, buyers are eager to get off the sidelines. Some have scooped up properties before they hit the market. For ultra-high-net-worth buyers and investors, whose wealth often grew during Covid, agents are hunting for off-market properties to generate deal flow.

“A lot of the phone calls I’m getting are from people who have come up short on their search,” said Tal Alexander of Douglas Elliman, who last year brokered an off-market deal for a penthouse at 421 Broome Street in SoHo that sold for a record $49 million about a year after trading for just over $35 million. Mr. Alexander was also involved in the $29 million off-market purchase of pop star Justin Timberlake’s penthouse at 443 Greenwich Street last year, and a $26 million off-market sale at 432 Park Avenue.

Mike Fabbri, an agent at Nest Seekers International, said he is currently shopping a four-bedroom condo on the Upper East Side for between $9 million and $11 million. “With the pandemic, pricing right now is all over the place,” he said. By testing the waters off-market, Mr. Fabbri said he is getting a sense of what buyers would pay before officially listing in the spring. “But if they get an offer at $11 million, they’ll take it and run,” he said, “and we won’t even list it.”

Earlier this year, Kayak co-founder and CEO Steve Hafner and his wife, Staci Hafner, sold their condo at Walker Tower in Chelsea for $23.5 million in an off-market deal. The couple listed the four-bedroom for $24.995 million in November 2020, but Mr. Hafner said they decided to rent it out after relocating to Miami. Halfway through a two-year lease, the tenant, whose identity couldn’t be determined, asked to buy the condo. “We quickly reached an agreement,” Mr. Hafner said. The deal closed in December.

For motivated buyers, paying a premium is worth it to secure a coveted property. Amazon founder Jeff Bezos paid $23 million in July to buy an off-market condo at 212 Fifth Avenue, where he already owns a triplex penthouse and two other units. The seller, Madison Flatiron LLC, paid $18.1 million in 2018, records show.

At lower price points, agents say off-market deals can have a big impact on price. When sellers have the upper hand, buyers may end up overpaying; without multiple bids, sellers risk leaving money on the table.

Developer Robert Kaliner of RoundSquare Builders recently scooped up adjacent townhouses in the West Village in separate off-market deals, paying about $9.3 million for 107 Bank Street and $8.8 million for 105 Bank Street. Mr. Kaliner, in business with his sons, Justin and Jared, said he met the sellers of 107 Bank first, through agents Matthew Lesser, Matthew Pravda and Ravi Kantha of Leslie J. Garfield, who heard they were thinking about selling.

Mr. Kaliner, who plans to combine the buildings into a roughly 40-foot-wide townhouse designed by Robert A.M. Stern Architects, said negotiating a deal off-market kept bidding from getting “excessively high.”

“We got a far better deal on these because they were off-market,” he said.

Gabriel Nussbaum, a filmmaker whose family sold 105 Bank, said he studied neighbourhood comps and felt the price was fair. Mr. Nussbaum, 39, said he has been approached many times about selling the building that his great-grandmother purchased for a few thousand dollars in the 1940s, but the timing was never right. Mr. Nussbaum has been living there for 20 years and said the building was in need of repair. Recently, his family considered renovating, but they were put off by rising construction costs and the time it would take to complete the project.

After Mr. Kaliner bought his neighbour’s home, Mr. Nussbaum asked if the developer wanted to buy his property, too. “I feel like we got a very good price,” he said. “This was definitely the bird in hand.”

Cassie Murdoch, 43, and her husband, Jack Fagan, 51, are hoping to sell their Brooklyn home privately. Prior to Covid, Ms. Murdoch, a digital producer, and Mr. Fagan, a stay-at-home dad, began renovating the Windsor Terrace house they bought for $1.4 million in 2018. The project would have expanded the home into what their agent, Abigail Palanca of Serhant, said would be a roughly $3.6 million property. But after demolishing the interior, their contractor went out of business, and the couple lost their appetite for completing the project. Given the unique circumstances, and since the house isn’t photo-ready, Ms. Palanca advised a whisper marketing campaign to find a buyer.

Barbara Fox of Fox Residential recently sold an approximately 6,000-square-foot apartment on Fifth Avenue for north of $25 million for clients who moved to their country home during Covid. She said the longtime owners preferred a whisper campaign because they didn’t need to sell, weren’t entirely sure if they wanted to sell and didn’t want the world knowing their plans.

The co-op was unofficially on the market for two years, and Ms. Fox said she thinks it might have sold in weeks had she been allowed to blast out the listing far and wide. Still, she said, “they didn’t care.”

PARIS —Paris has long been a byword for luxurious living. The traditional components of the upscale home, from parquet floors to elaborate moldings, have their origins here. Yet settling down in just the right address in this low-rise, high-density city may be the greatest luxury of all.

Tradition reigns supreme in Paris real estate, where certain conditions seem set in stone—the western half of the city, on either side of the Seine, has long been more expensive than the east. But in the fashion world’s capital, parts of the housing market are also subject to shifting fads. In the trendy, hilly northeast, a roving cool factor can send prices in this year’s hip neighborhood rising, while last year’s might seem like a sudden bargain.

This week, with the opening of the Olympic Games and the eyes of the world turned toward Paris, The Wall Street Journal looks at the most expensive and desirable areas in the City of Light.

The Most Expensive Arrondissement: the 6th

Known for historic architecture, elegant apartment houses and bohemian street cred, the 6th Arrondissement is Paris’s answer to Manhattan’s West Village. Like its New York counterpart, the 6th’s starving-artist days are long behind it. But the charm that first wooed notable residents like Gertrude Stein and Jean-Paul Sartre is still largely intact, attracting high-minded tourists and deep-pocketed homeowners who can afford its once-edgy, now serene atmosphere.

Le Breton George V Notaires, a Paris notary with an international clientele, says the 6th consistently holds the title of most expensive arrondissement among Paris’s 20 administrative districts, and 2023 was no exception. Last year, average home prices reached $1,428 a square foot—almost 30% higher than the Paris average of $1,100 a square foot.

According to Meilleurs Agents, the Paris real estate appraisal company, the 6th is also home to three of the city’s five most expensive streets. Rue de Furstemberg, a secluded loop between Boulevard Saint-Germain and the Seine, comes in on top, with average prices of $2,454 a square foot as of March 2024.

For more than two decades, Kyle Branum, a 51-year-old attorney, and Kimberly Branum, a 60-year-old retired CEO, have been regular visitors to Paris, opting for apartment rentals and ultimately an ownership interest in an apartment in the city’s 7th Arrondissement, a sedate Left Bank district known for its discreet atmosphere and plutocratic residents.

“The 7th was the only place we stayed,” says Kimberly, “but we spent most of our time in the 6th.”

In 2022, inspired by the strength of the dollar, the Branums decided to fulfil a longstanding dream of buying in Paris. Working with Paris Property Group, they opted for a 1,465-square-foot, three-bedroom in a building dating to the 17th century on a side street in the 6th Arrondissement. They paid $2.7 million for the unit and then spent just over $1 million on the renovation, working with Franco-American visual artist Monte Laster, who also does interiors.

The couple, who live in Santa Barbara, Calif., plan to spend about three months a year in Paris, hosting children and grandchildren, and cooking after forays to local food markets. Their new kitchen, which includes a French stove from luxury appliance brand Lacanche, is Kimberly’s favourite room, she says.

Another American, investor Ashley Maddox, 49, is also considering relocating.

In 2012, the longtime Paris resident bought a dingy, overstuffed 1,765-square-foot apartment in the 6th and started from scratch. She paid $2.5 million and undertook a gut renovation and building improvements for about $800,000. A centrepiece of the home now is the one-time salon, which was turned into an open-plan kitchen and dining area where Maddox and her three children tend to hang out, American-style. Just outside her door are some of the city’s best-known bakeries and cheesemongers, and she is a short walk from the Jardin du Luxembourg, the Left Bank’s premier green space.

“A lot of the majesty of the city is accessible from here,” she says. “It’s so central, it’s bananas.” Now that two of her children are going away to school, she has listed the four-bedroom apartment with Varenne for $5 million.

The Most Expensive Neighbourhoods: Notre-Dame and Invalides

Garrow Kedigian is moving up in the world of Parisian real estate by heading south of the Seine.

During the pandemic, the Canada-born, New York-based interior designer reassessed his life, he says, and decided “I’m not going to wait any longer to have a pied-à-terre in Paris.”

He originally selected a 1,130-square-foot one-bedroom in the trendy 9th Arrondissement, an up-and-coming Right Bank district just below Montmartre. But he soon realised it was too small for his extended stays, not to mention hosting guests from out of town.

After paying about $1.6 million in 2022 and then investing about $55,000 in new decor, he put the unit up for sale in early 2024 and went house-shopping a second time. He ended up in the Invalides quarter of the 7th Arrondissement in the shadow of one Paris’s signature monuments, the golden-domed Hôtel des Invalides, which dates to the 17th century and is fronted by a grand esplanade.

His new neighbourhood vies for Paris’s most expensive with the Notre-Dame quarter in the 4th Arrondissement, centred on a few islands in the Seine behind its namesake cathedral. According to Le Breton, home prices in the Notre-Dame neighbourhood were $1,818 a square foot in 2023, followed by $1,568 a square foot in Invalides.

After breaking even on his Right Bank one-bedroom, Kedigian paid $2.4 million for his new 1,450-square-foot two-bedroom in a late 19th-century building. It has southern exposures, rounded living-room windows and “gorgeous floors,” he says. Kedigian, who bought the new flat through Junot Fine Properties/Knight Frank, plans to spend up to $435,000 on a renovation that will involve restoring the original 12-foot ceiling height in many of the rooms, as well as rescuing the ceilings’ elaborate stucco detailing. He expects to finish in 2025.

Over in the Notre-Dame neighbourhood, Belles demeures de France/Christie’s recently sold a 2,370-square-foot, four-bedroom home for close to the asking price of about $8.6 million, or about $3,630 a square foot. Listing agent Marie-Hélène Lundgreen says this places the unit near the very top of Paris luxury real estate, where prime homes typically sell between $2,530 and $4,040 a square foot.

The Most Expensive Suburb: Neuilly-sur-Seine

The Boulevard Périphérique, the 22-mile ring road that surrounds Paris and its 20 arrondissements, was once a line in the sand for Parisians, who regarded the French capital’s numerous suburbs as something to drive through on their way to and from vacation. The past few decades have seen waves of gentrification beyond the city’s borders, upgrading humble or industrial districts to the north and east into prime residential areas. And it has turned Neuilly-sur-Seine, just northwest of the city, into a luxury compound of first resort.

In 2023, Neuilly’s average home price of $1,092 a square foot made the leafy, stately community Paris’s most expensive suburb.

Longtime residents, Alain and Michèle Bigio, decided this year is the right time to list their 7,730-square-foot, four-bedroom townhouse on a gated Neuilly street.

The couple, now in their mid 70s, completed the home in 1990, two years after they purchased a small parcel of garden from the owners next door for an undisclosed amount. Having relocated from a white-marble château outside Paris, the couple echoed their previous home by using white- and cream-coloured stone in the new four-story build. The Bigios, who will relocate just back over the border in the 16th Arrondissement, have listed the property with Emile Garcin Propriétés for $14.7 million.

The couple raised two adult children here and undertook upgrades in their empty-nester years—most recently, an indoor pool in the basement and a new elevator.

The cool, pale interiors give way to dark and sardonic images in the former staff’s quarters in the basement where Alain works on his hobby—surreal and satirical paintings, whose risqué content means that his wife prefers they stay downstairs. “I’m not a painter,” he says. “But I paint.”

The Trendiest Arrondissement: the 9th

French interior designer Julie Hamon is theatre royalty. Her grandfather was playwright Jean Anouilh, a giant of 20th-century French literature, and her sister is actress Gwendoline Hamon. The 52-year-old, who divides her time between Paris and the U.K., still remembers when the city’s 9th Arrondissement, where she and her husband bought their 1,885-square-foot duplex in 2017, was a place to have fun rather than put down roots. Now, the 9th is the place to do both.

The 9th, a largely 19th-century district, is Paris at its most urban. But what it lacks in parks and other green spaces, it makes up with nightlife and a bustling street life. Among Paris’s gentrifying districts, which have been transformed since 2000 from near-slums to the brink of luxury, the 9th has emerged as the clear winner. According to Le Breton, average 2023 home prices here were $1,062 a square foot, while its nearest competitors for the cool crown, the 10th and the 11th, have yet to break $1,011 a square foot.

A co-principal in the Bobo Design Studio, Hamon—whose gut renovation includes a dramatic skylight, a home cinema and air conditioning—still seems surprised at how far her arrondissement has come. “The 9th used to be well known for all the theatres, nightclubs and strip clubs,” she says. “But it was never a place where you wanted to live—now it’s the place to be.”

With their youngest child about to go to college, she and her husband, 52-year-old entrepreneur Guillaume Clignet, decided to list their Paris home for $3.45 million and live in London full-time. Propriétés Parisiennes/Sotheby’s is handling the listing, which has just gone into contract after about six months on the market.

The 9th’s music venues were a draw for 44-year-old American musician and piano dealer, Ronen Segev, who divides his time between Miami and a 1,725-square-foot, two-bedroom in the lower reaches of the arrondissement. Aided by Paris Property Group, Segev purchased the apartment at auction during the pandemic, sight unseen, for $1.69 million. He spent $270,000 on a renovation, knocking down a wall to make a larger salon suitable for home concerts.

During the Olympics, Segev is renting out the space for about $22,850 a week to attendees of the Games. Otherwise, he prefers longer-term sublets to visiting musicians for $32,700 a month.

Most Exclusive Address: Avenue Junot

Hidden in the hilly expanses of the 18th Arrondissement lies a legendary street that, for those in the know, is the city’s most exclusive address. Avenue Junot, a bucolic tree-lined lane, is a fairy-tale version of the city, separate from the gritty bustle that surrounds it.

Homes here rarely come up for sale, and, when they do, they tend to be off-market, or sold before they can be listed. Martine Kuperfis—whose Paris-based Junot Group real-estate company is named for the street—says the most expensive units here are penthouses with views over the whole of the city.

In 2021, her agency sold a 3,230-square-foot triplex apartment, with a 1,400-square-foot terrace, for $8.5 million. At about $2,630 a square foot, that is three times the current average price in the whole of the 18th.

Among its current Junot listings is a 1930s 1,220-square-foot townhouse on the avenue’s cobblestone extension, with an asking price of $2.8 million.